FRANKFURT (Reuters) -- Daimler may sell four company-owned Mercedes-Benz dealerships in Germany to cut costs and help close a profitability gap with rivals BMW and Audi, which rely more on franchises run by private entrepreneurs to sell cars.
Daimler could mount a bigger sell-off if those transactions go well, a person familiar with the company's thinking told Reuters.
Among the three German premium carmakers, Daimler depends on its unprofitable company-owned dealerships for a bigger share of domestic sales than either of its competitors.
Daimler owns 98 Mercedes car showrooms that account for about half of its car sales in Germany, the brand's second-biggest market after the United States. BMW's 43 owned dealerships contribute about a quarter of its volumes in Germany and Audi's 16 in-house outlets account for less than 10 percent.
According to documents seen by Reuters, Daimler CEO Dieter Zetsche is targeting the company's retail operations as part of a promised 2 billion euro ($2.6 billion) savings drive.
"Management wants to try this out to see exactly how it would work in practice," said the person, who asked not to be named. "They are gathering experience that could serve as a blueprint," he said, adding "Zetsche is no fan of own retail."
Daimler is in talks to sell two dealerships in northern Germany and two in western Germany to existing franchise holders, sources said.
By selling off more outlets, Mercedes could cut its 16,000-strong German retail staff and associated costs including vacation pay, Christmas bonuses, corporate pensions and profit shares -- perks that most franchise staff don't receive.
"Our own retail showrooms naturally have to be competitive when benchmarked against franchise dealers," Daimler said in an e-mailed statement, adding this had become "ever more challenging" in its weakening domestic market.
"There is currently no final concept for restructuring the group's own retail network in Germany but different options are still being evaluated," the company said. It declined to comment specifically on disposals.
Car dealerships are typically a 2-4 percent margin business at best, which drags down overall margins for premium manufacturers.